The economy redux?

I waited a bit before posting my first blog of 2016, as I wanted to get a flavor for how the new year would start.

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I waited a bit before posting my first blog of 2016, as I wanted to get a flavor for how the new year would start. Same old, same old—China drops another "economic bomb," almost precipitating a stock market crash; the EU is in terrorist turmoil; US regulators threaten VW with a massive fine that could have severe consequences to auto sales; and El Niño precipitates monsoon-like rains in Southern California, contradicting the title of that old Albert Hammond tune "It Never Rains in Southern California." All but the latter are déjà-vu of last year.

Within days of reading this, many of you will also be perusing my Annual Economic Review of the industrial laser market. If you don’t subscribe to ILS, you will need to in order to see the report (go to www.industrial-lasers.com/subscribe.html and sign up for a free subscription.) I expect a lot of feedback this year, as the analysis emphasizes the power of fiber lasers and their impact on other sectors, such as high-power CO2 lasers.

When we first analyzed the revenue numbers from our partner Strategies Unlimited, we thought a computer glitch had inflated the totals—but as the old saying goes, "the numbers don't lie." And try as we might, they kept telling us that the industrial laser business was out of sync with the reversals in the global economic situation (see above). The sector that concerned us in 2015 was manufacturing. The beacon of hope was the US, which had countered negative international news all year, but let us down with end-of-the-year negative PMI numbers for two months in a row.

So, why did the 2015 industrial laser market outperform the global machine tool market? Hate to be a tease, but subscribe and read all about it. One hint—marketplace diversification.

Many market analysts think that—all things being equal—2016 will be a repeat of 2015, with a slow first half followed by a pickup in the third quarter. We said the same for the laser market in our Annual Economic Review last January, and it did the same with a strong start to the second half of the year before a letdown at the end of the year.

After this mixed news, it's time for me to wish all a happy and prosperous new year, with emphasis on the latter. And don't forget to get that free subscription to ILS.

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